Telesis Splits Personality to Fulfill Its Dual Roles

SAN FRANCISCO — Engineers are probing the superstructure of the 60-year-old headquarters of Pacific Telephone & Telegraph, reincarnated as Pacific Telesis Group after the forced breakup of the Bell System. They are assessing the aging tower's ability to handle the stress of a major earthquake.

Inside, similar attention is being paid to the ability of the company's 72,000 employees to hold up under the forces reshaping the once pervasive, cradle-to-grave Ma Bell corporate "culture."

These employees must now march to a new drummer--one that offers a steady, carefully regulated beat for Pacific Bell, the phone company, while improvising something more free-form for Pacific Telesis' half a dozen new, market-oriented subsidiaries, which are involved in such varied enterprises as real estate, publishing and high-tech office systems.

Now, for the first time, 23,000 managers on both the regulated and unregulated sides of Pacific Telesis find that an average of 20% of their potential year's pay is linked to achieving specific revenue goals. Annual bonuses range from about 10% of salary to as much as 40% at the top of the executive ladder, where compensation had been frozen for more than a year.

In addition, performance incentives are proliferating among the new companies. At PacTel InfoSystems' new retail store in San Mateo, pay is based on an individual's own sales, and the company's new president, recruited from outside Bell, emphasizes his entrepreneurial drive by quipping that he's going to print up buttons proclaiming: "Get high on stress!"

Employees Put to Test

In short, new corporate needs, new measures of success and new markets to conquer are sure to test Pacific Telesis employees as Chairman Donald Guinn and his lieutenants strive, as they say, "to teach this elephant to tap-dance."

Calling the tunes for Guinn are Pacific Telesis' vice chairmen, both Bell veterans: Theodore J. Saenger, who heads the regulated subsidiaries, and Sam Ginn, who is responsible for the seven subsidiaries created so far to test nonregulated markets.

Saenger, 56, supervises Pacific Bell and Nevada Bell, the regulated telephone companies that inherited Pacific Telephone's local operations, much of its service orientation and all of its generous but regulated revenue stream (which in 1984 furnished all of Pacific Telesis' $829 million in net income). Also under Saenger is Pacific Bell Directory, a new company that publishes the old Pacific Telephone directories for the phone companies.

The famous Bell "culture"--which offered lifetime employment and promotion from within in exchange for unswerving loyalty to the "mission" of providing high-quality telephone service to every corner of the United States--is changing as Pacific Telesis seeks an identity broad enough to encompass the telephone companies and the more go-go subsidiaries created since divestiture on Jan. 1, 1984.

Worthy Mission

"Our mission was a very, very worthy one for our country, laying the base for development of our country and its economic system," Ginn recalled of the old Bell System. "It was more than a means to making a living."

But "current realities dictate some changes," Saenger acknowledged in a separate interview, adding: "We're working on the corporate architecture of this place." While each of the Pacific Telesis companies will emphasize a certain style, he said, the holding company "puts a sort of framework around its values and goals, and then looks to its companies to see that they are in concert with what these represent."

Even on the regulated side, Saenger said, the three subsidiaries differ. Nevada Bell is much smaller and has a more informal corporate style than huge Pacific Bell. And Pacific Bell Directory, which faces competition from other phone-book publishers, especially in hot markets such as the San Fernando Valley, is developing "a very distinctive culture, very competitive."

Before divestiture from American Telephone & Telegraph, Pacific Telephone executives recognized that "the world had changed," he said, that the market is "less integrated with more actors on the stage providing services," and that "we had better understand our customers far better in the new world. . . .

"We're still very much a mass-production operation," Saenger said, "but we recognize that . . . we have to be responsive to our customers."

Cultural Differences

But the two sides are already distinguished by significant cultural differences, many of them stemming from the fact that 70% of Ginn's work force came from outside the Bell System.

"When I arrived 6 1/2 months ago," Will Luden, president of PacTel InfoSystems, recalled with a laugh, "they said I had come 'off the street'--and they didn't mean Wall Street."